Investors should still feel comfortable buying dividend stocks, despite the looming “fiscal cliff” that could send dividend tax rates skyrocketing. That’s the word from Andrew Stout, senior investment officer at MCF Advisors LLC in Covington. Stout said dividend taxes, like much of the tax hikes and spending cuts that will result if the economy goes over the fiscal cliff, might be much ado about nothing.
“The cliff will be more like a bunny hill,” Stout said. “I don’t think it’s going to amount to much.” He expects dividend tax rates to rise, but only to about 20 percent. They’re at 15 percent now. Likewise, he sees the top income tax rate rising, but just from 35 percent to about 39 percent. So MCF is putting more money than normal into dividend stocks, Stout said. Those have sold off in recent months in anticipation of the cliff, making them better values.